According to a study from the Boston University School of Law, patent litigation caused by "non-practicing entities" (NPEs), better known as "patent trolls," cost U.S. software and hardware companies US$29 billion in 2011. NPEs are individuals and firms that own patents but do not directly use their patented technology to produce goods or services and instead assert their patent rights against companies that do. Patent litigation costs to technology companies from NPE lawsuits have dramatically risen from $6.7 billion in 2005 to $12.6 billion in 2008 and more than $29.2 billion in 2011. The report goes on to state that "The rapid growth and high cost of NPE litigation documented here should set off an alarm warning to policy makers…" Well, it certainly has in Korea. A new report published today indicates that the domestic smartphone industry has indeed pressed the panic button to set off the alarm regarding the damage that patent trolls are exacting on their industry.
According to the Electronic Times Internet, the "domestic smartphone industry is in a state of emergency due to global 'patent trolls' launching a series of attacks. The report states that "Unlike rival manufacturers such as Apple and Nokia, there is no way to reach cross-license agreements with patent trolls through counter-suits." One of the key culprits that the article points to is InterDigital who has filed for 618 wireless related patents in the US this year alone, with close to 78% of them under examination by the US Patent and Trademark Office at this time.
How could the smartphone industry counter these patent trolls? The Boston University School of Law states that in order to change things, it is crucial to provide greater transparency in the patent system and courts should rigorously supervise patent damages awards to make sure that damages are proportional to the value of the patented technology. Besides that, the researchers called for policy reforms to constrain the generic problem of frivolous lawsuits.
Hmm, something tells me that we've been hearing about such remedies for some time now with little to nothing meaningful ever getting accomplished. Perhaps one of these fine days theoretical academic studies will turn into meaningful legal meat cleavers that will provide legitimate wireless companies with the legal means to control the runaway court damages that the Big Game Hunting patent trolls are now collecting.
To see some of the cases that Patent Trolls are launching against Apple, see our Patently Legal Archives.
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